TIDEWATER MIDSTREAM AND INFRASTRUCTURE LTD. ANNOUNCES FOURTH QUARTER AND YEAR-END 2024 RESULTS AND OPERATIONAL UPDATE

Canada NewsWire

CALGARY, AB, March 27, 2025

(TSX: TWM)

CALGARY, AB, March 27, 2025 /CNW/ - Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX: TWM) has filed its consolidated financial statements and Management Discussion and Analysis ("MD&A") for the year ended December 31, 2024.

Fourth Quarter 2024 Highlights

   -- Consolidated net loss attributable to shareholders was $3.3 million 
      during the fourth quarter of 2024, compared to a net loss attributable to 
      shareholders of $331.8 million during the fourth quarter of 2023. The 
      decrease in net loss attributable to shareholders is largely due to the 
      reversal of certain non-cash impairment charges previously taken in 2023, 
      offset in part by the gain on sale of the Pipestone natural gas plant, 
      expansion project at the Pipestone natural gas plant, the Dimsdale 
      natural gas storage assets, and associated gathering and other 
      infrastructure to AltaGas Ltd. in the fourth quarter of 2023 (the 
      "Pipestone Transaction"). 
 
   -- Consolidated adjusted EBITDA(1) was $20.0 million during the fourth 
      quarter of 2024, compared to $21.4 million during the fourth quarter of 
      2023. The decrease was primarily due to higher adjusted EBITDA from 
      equity investments and lower realized losses on derivative contracts in 
      the comparative period, offset in part by lower general and 
      administrative costs in the current quarter. 
 
   -- During the quarter, the Corporation's offtake agreement with Cenovus 
      Energy Inc. (the "Offtake Agreement") expired and the Corporation 
      successfully transitioned to marketing its refined products in-house. 
      However, refining margins for the company's products have been negatively 
      impacted by the dumping of subsidized U.S. renewable diesel into the BC 
      market causing the market to become oversupplied. On December 30, 2024, 
      Tidewater Renewables Ltd. ("Tidewater Renewables") filed a trade 
      complaint (the "Complaint") with the Canada Border Services Agency 
      ("CBSA") which management of the Corporation believes will result in 
      duties being imposed that will remedy and offset the significant impact 
      of U.S. subsidies, which enable U.S. producers to export renewable diesel 
      to Canada at artificially low prices. 
 
   -- During the quarter, the Corporation recorded $24.3 million of net 
      reversals of previously recorded impairment charges on its midstream 
      assets in the Deep Basin cash generating unit. The increase in the net 
      estimated recoverable amount was primarily due to the elimination of the 
      take-or-pay fees paid to Tidewater Renewables as a result of the 
      Transaction (as defined below), and the review of the recoverable amount 
      of the Brazeau River Complex roadway network (the "BRC Roadway Network") 
      which, subsequent to the period, Tidewater Midstream sold to Canadian 
      Roadways LP ("CRR"), for total proceeds of $24 million. 

Full-Year 2024

   -- Full year 2024 consolidated net loss attributable to shareholders was 
      $26.6 million compared to net loss attributable to shareholders of $385.9 
      million during the year ended December 31, 2023. The improvement is 
      largely due to the reversal of non-cash impairment charges previously 
      taken in 2023 and higher operating income, offset in part by the gain on 
      sale on the Pipestone Transaction in 2023 and lower deferred income tax 
      recoveries in the current year. 
 
   -- Full year 2024 consolidated adjusted EBITDA(1) was $134.3 million, 
      compared to $162.9 million during 2023. The decrease was largely due to 
      losses on the settlement of vegetable oil derivative contracts and lower 
      adjusted EBITDA from equity investments in the current year, partially 
      offset by higher operating income and lower general and administrative 
      costs in 2024. 
 
   -- In early May 2024, Tidewater successfully completed the three-week 
      turnaround at the Brazeau River Complex and Fractionation Facility (the 
      "BRC") safely, on time and approximately $5.0 million below initial cost 
      expectations. 
 
   -- During the third quarter of 2024, Tidewater Midstream completed the 
      issuance of $100 million of convertible unsecured subordinated debentures 
      (the "Convertible Debentures") at a price of $1,000 per debenture. The 
      Convertible Debentures mature on June 30, 2029, and accrue interest at 8% 
      per annum, payable semi-annually, on the last day of June and December, 
      commencing December 31, 2024. Proceeds from the issuance were used to 
      satisfy and discharge Tidewater Midstream's $75 million convertible 
      debentures due September 30, 2024, with the remaining proceeds used for 
      general corporate purposes. 
 
   -- During the third quarter of 2024, Tidewater Midstream completed the 
      Transaction, in which Tidewater Midstream acquired various assets from 
      Tidewater Renewables, including the canola co-processing and fluid 
      catalytic cracking co-processing infrastructure, working interests in 
      various other Prince George Refinery ("PGR") units, a natural gas storage 
      facility located at the BRC (collectively, the "Acquired Assets"), for 
      cash consideration of $122.0 million, plus the assumption of certain 
      liabilities related to the Acquired Assets. Additionally, as part of the 
      consideration, Tidewater Midstream assigned the right to receive certain 
      British Columbia Low Carbon Fuel Standard emission credits ("BC LCFS 
      Credits") with a minimum value of $7.7 million to Tidewater Renewables. 
 
   -- Tidewater Midstream and Tidewater Renewables also entered into an 
      agreement for the purchase and sale of BC LCFS credits (the "BC LCFS 
      Credit Purchase Agreement"), under which Tidewater Midstream agreed to 
      purchase BC LCFS Credits from Tidewater Renewables for an aggregate 
      purchase price of $7.2 million, and agreed to purchase additional BC LCFS 
      Credits (subject to certain monthly average limits) from Tidewater 
      Renewables until March 31, 2025, for cash proceeds of approximately $77.5 
      million (assuming the HDRD Complex continues to operate at over 90% 
      utilization). 
 
   -- Concurrent with the close of the Transaction, the Corporation 
      successfully amended and restated its senior credit facility, increasing 
      the aggregate revolving capacity by $25 million, from $150 million to 
      $175 million, and extending the maturity date from February 10, 2026 to 
      September 12, 2026. The Corporation also added a three-year delayed draw 
      term loan tranche of $150 million to finance the Acquired Assets and the 
      portion of the BC LCFS Credits mentioned above. 
 
   -- On September 12, 2024, Tidewater Renewables closed the sale of its used 
      cooking oil feedstock assets, generating total proceeds of $10.6 million. 
      The proceeds from this transaction were used to reduce outstanding debt 
      on Tidewater Renewables' senior credit facility. 
 
   -- Throughout 2024, Tidewater Midstream implemented general and 
      administrative cost cutting initiatives that resulted in over $5 million 
      in cost savings. 
 
_________________________________ 
(1)  Non-GAAP financial measure. See the "Non-GAAP Measures" 
      section of this news release. 
 

Subsequent Events

   -- On January 10, 2025, Tidewater Renewables completed the sale of its 
      interest in the Rimrock Renewables Partnership ("RNG LP") to Biocirc 
      Canada Holdings Inc., an affiliate of Biocirc Group ApS for total 
      proceeds of $7.8 million, of which $4.7 million was received on close and 
      a further $3.1 million could be received upon the satisfaction of certain 
      post-closing conditions on or before December 30, 2025. The net proceeds 
      of this transaction were used to repay outstanding indebtedness. 
 
   -- On February 27, 2025, the Government of British Columbia announced 
      changes to the Low Carbon Fuels Act (the "Amendments"), specifically to 
      increase to the renewable fuel requirement for diesel from 4% to 8% for 
      the 2025 compliance period, together with, effective April 1, 2025, 
      requiring such renewable fuel content to be produced in Canada. 
      Management believes that the Amendments represent a good first step in 
      levelling the unfair trade environment and supporting the economic 
      viability of Tidewater Renewables and the broader Canadian biofuels 
      industry. 
 
   -- On March 6, 2025 Tidewater Midstream announced it had entered into a 
      definitive agreement with CRR, for the sale of its BRC Roadway Network 
      for total proceeds of $24 million. The BRC Roadway Network is a non-core 
      asset of Tidewater Midstream and the disposition of the BRC Roadway 
      Network is expected to have an immaterial impact to Tidewater Midstream's 
      2025 operating results. The sale closed on March 24, 2025. Of the $24 
      million in total proceeds, $22.5 million was received upon closing, with 
      the balance expected to be received on or before December 31, 2025. 
 
   -- In early March 2025, the CBSA formally initiated a countervailing 
      (anti-subsidy) and anti-dumping duty investigation into imports of 
      renewable diesel from the United States (the "Investigation"). In 
      initiating the Investigation, the CBSA confirms that Tidewater Renewables 
      provided satisfactory evidence to support its allegations that U.S. 
      renewable diesel imports were subsidized and dumped, causing harm to 
      Tidewater Renewables. A decision by the CBSA regarding whether 
      provisional duties will be imposed at the Canada-U.S. border is 
      anticipated by June 2025. Final duties, which would be in place for five 

      years and can be renewed every five years thereafter, could be imposed by 
      September 2025 following a ruling by the Canadian International Trade 
      Tribunal. If final duties are imposed at the levels expected by 
      management, valued between $0.50 and $0.80 per litre of renewable diesel 
      imported from the United States, these duties would support long-term 
      market stability for Tidewater Renewables' renewable diesel production 
      and its related emission credits. 
 
   -- On March 26, 2025, with the support of its lenders, Tidewater Midstream 
      amended the financial covenant requirements within the Fifth Amended and 
      Restated Credit Agreement effective January 1, 2025 until March 31, 2026, 
      to increase the first lien senior debt to adjusted EBITDA covenant up to 
      4.50:1 (from 3.50:1) , and decrease the adjusted EBITDA to interest 
      coverage ratio to 1.50:1 (from 2.50:1) during the period. These 
      amendments will assist in providing financial flexibility as Tidewater 
      navigates current market conditions. 
 
   -- On March 26, 2025, Tidewater Renewables, with the support of its lenders, 
      successfully amended its senior credit facility and second lien credit 
      facility. The amendments provide over $15.0 million of additional 
      capacity to the Tidewater Renewables credit facilities and extends the 
      maturity date of the second lien tranche B and tranche C facilities from 
      February 28, 2026, to October 24, 2027. The amendments also waive the 
      requirements to comply with the quarterly financial covenants until March 
      31, 2026, previously waived until September 30, 2025, at which time the 
      Tidewater Renewables will be required to maintain certain financial 
      covenants on an annualized basis. 

CEO Quote:

2024 was a busy year for Tidewater,

Before I enumerate our accomplishments over the year, I wanted to take a step back to when I joined in January 2024. At that time, the Company had just completed a strategic review which culminated in the sale of the Pipestone natural gas plant, Pipestone expansion project and the Dimsdale natural gas storage facility and associated gathering and other infrastructure assets in December 2023.

Since that time, we have continued making progress towards improving our operations and optimizing our asset portfolio. Our strategy is supported by three key initiatives: maintaining safe and reliable operations, driving ongoing operational efficiencies, and optimizing our asset portfolio to ensure we have the right mix of assets that are generating appropriate returns.

In 2024, Tidewater Midstream achieved several key milestones as we continue to progress on our strategy.

   -- Completed the refinancing of our convertible debentures 
 
   -- Implemented significant operational and administrative costs savings 
 
   -- Completed the Transaction with Tidewater Renewables and simplified our 
      business and our reporting 
 
   -- Finalized the sale of the BRC Roadway Network and repaid $22.5 million of 
      debt 
 
   -- Completed a major turnaround at the BRC below our initial cost estimates 
 
   -- Built an in-house marketing organization following the expiration of the 
      Offtake Agreement 

At Tidewater Renewables we:

   -- Commissioned HDRD and got it running reliably 
 
   -- Completed several non-core asset sales, including Eco Dine in September 
      2024 and Rimrock Renewable Ltd. Partnership in January 2025 
 
   -- Made significant progress on required regulatory policy changes 
 
   -- Strengthened Tidewater Renewables' balance sheet by completing the 
      Transaction with Tidewater Midstream, which reduced debt and lowered 
      financing costs. In addition, the forward sale of BC LCFS Credits to 
      Tidewater Midstream until March 2025 provided Tidewater Renewables with a 
      reliable source of cash flow, allowing the Company to continue to focus 
      on its renewable fuels business 
 
   -- Completed refinancing 

I'm very proud of our Tidewater team and am very confident in our ability to continue to progress on our plan and achieve our goal of delivering sustainable free cash flow and growth."

-Stated CEO Jeremy Baines

CONSOLIDATED AND DECONSOLIDATED FINANCIAL HIGHLIGHTS

 
                  Three months ended December 31 
                  TidewaterDeconsolidated (2)      TidewaterConsolidated 
(in millions of       2024           2023              2024        2023 
Canadian dollars 
except per share 
information) 
Net income 
 (loss) 
 attributable to 
 shareholders      $        2.4   $       (329.4)   $      (3.3)  $  (331.8) 
Net income 
 (loss) 
 attributable to 
 shareholders 
 pershare - 
 basic             $       0.01   $        (0.77)   $     (0.01)  $   (0.78) 
Adjusted EBITDA 
 (1)               $       14.0   $          10.7   $       20.0  $     21.4 
Distributable 
 cash flow 
 attributable to 
 shareholders 
 (1)               $      (6.6)   $        (37.4)   $     (11.7)  $   (36.0) 
Distributable 
 cash flow per 
 share -- basic 
 (1)               $     (0.02)   $        (0.09)   $     (0.03)  $   (0.08) 
Net debt (3)       $      381.8   $         397.3   $      577.6  $    744.0 
Total capital 
 expenditures      $        5.5   $          19.4   $       11.2  $     51.2 
 
 
(1)  Non-GAAP financial measures. See the "Non-GAAP Measures" 
      section of this news release. 
(2)  Deconsolidated results exclude the results of Tidewater 
      Renewables. See the "Non-GAAP Measures" section of 
      this news release for information on deconsolidated 
      measures. 
(3)  Capital management measure. See the "Non-GAAP Measures" 
      section of this news release. 
 
 
                  Year ended December 31 
                  TidewaterDeconsolidated (2)      TidewaterConsolidated 
(in millions of       2024           2023              2024        2023 
Canadian dollars 
except per share 
information) 
Net loss 
 attributable to 
 shareholders      $     (40.7)   $       (371.3)   $     (26.6)  $  (385.9) 
Net loss 
 attributable to 
 shareholders 
 pershare - 
 basic             $     (0.09)   $        (0.87)   $     (0.06)  $   (0.91) 
Adjusted EBITDA 
 (1)               $       59.8   $         117.0   $      134.3  $    162.9 
Distributable 
 cash flow 
 attributable to 
 shareholders 
 (1)               $     (22.7)   $        (66.1)   $      (3.1)  $   (64.3) 
Distributable 
 cash flow per 
 share -- basic 
 (1)               $     (0.05)   $        (0.16)   $     (0.01)  $   (0.15) 
Net debt (3)       $      381.8   $         397.3   $      577.6  $    744.0 
Total capital 
 expenditures      $       23.4   $          87.1   $       44.9  $    292.6 
 
 
(1)  Non-GAAP financial measures. See the "Non-GAAP Measures" 
      section of this news release. 
(2)  Deconsolidated results exclude the results of Tidewater 
      Renewables. See the "Non-GAAP Measures" section of 
      this news release for information on deconsolidated 
      measures. 
(3)  Capital management measure. See the "Non-GAAP Measures" 
      section of this news release. 
 

CAPITAL EXPENDITURES

 
                        Three months ended      Year endedDecember 31, 
                         December 31, 
(in millions of             2024       2023         2024         2023 
Canadian dollars) 
Growth capital (1)       $       7.2  $   36.7   $        21.1  $    216.6 
Maintenance capital 
 (1)                             4.0      14.5            23.8        76.0 
Total capital 
 expenditures            $      11.2  $   51.2   $        44.9  $    292.6 
Capital emission 
 credits awarded (2)     $     (3.6)  $  (0.3)   $      (46.5)  $   (82.7) 
 
 
(1)  Supplementary financial measures. See the "Non-GAAP 
      Measures" section of this news release. 
(2)  During the three months and year ended December 31, 
      2024, $NIL and $23.6 million of capital emission credits 
      were monetized, respectively. 
 

2025 CAPITAL PROGRAM:

Tidewater's consolidated full-year 2025 capital program is focused on maintaining safe and reliable operations and is expected to range between $15 million - $20 million.

DOWNSTREAM

PGR

During the fourth quarter of 2024, total throughput at the PGR was 10,963 bbl/day, 6% lower than the third quarter of 2024 primarily due to both internally scheduled and third-party maintenance work. Total throughput was 10% lower than the fourth quarter of 2023 largely due to third-party pipeline maintenance that decreased the volume of crude feedstock coming into the facility and limited availability of intermediate feedstocks. The PGR is currently on a four-year turnaround cycle, with the next scheduled turnaround in the second quarter of 2027.

As previously disclosed, the Offtake Agreement expired on November 1, 2024. The Offtake Agreement provided for the sale of the majority of the nameplate capacity on diesel and gasoline volumes produced at the PGR. The Corporation is now marketing diesel and gasoline volumes from the PGR and HDRD Complex directly to its customers. Following the expiry of the Offtake Agreement, Tidewater successfully entered into agreements to replace the vast majority of the nameplate capacity on diesel and gasoline volumes produced at the PGR and the HDRD Complex for 2024 and is in the process of marketing the nameplate capacity on diesel and gasoline volumes produced at the PGR and the HDRD Complex for the remainder of 2025. Current wholesale discounts are wider than those at the time the Offtake Agreement was entered into, largely stemming from the oversupply of imported diesel in Western Canada as well as North American supply and demand fundamentals. Wider wholesale discounts are expected to yield lower margins until the outcome of the Complaint is determined and the unbalanced trade environment and high volume of diesel imports inundating the BC market is addressed. Tidewater is working to optimize its netbacks on its diesel and gasoline. While Tidewater is focused on Western Canadian markets, in the

event the Corporation is unable to place all its products in Western Canada, it may be required to export the balance to potentially lower margin markets.

PGR Historical Performance:

 
                         Q2     Q3      Q4      Q1      Q2      Q3      Q4 
                          2023   2023    2023    2024    2024    2024    2024 
Daily throughput (bbl)   4,363  12,756  12,242  12,399  12,022  11,664  10,963 
Refinery Yield (1) 
 Diesel                   46 %    44 %    48 %    46 %    46 %    42 %    40 % 
 Gasoline                 41 %    42 %    40 %    41 %    39 %    43 %    44 % 
 Other (2)                13 %    14 %    12 %    13 %    15 %    15 %    16 % 
 
 
(1)  Refinery yield includes crude, canola and intermediates. 
(2)  Other refers to heavy fuel oil (HFO), liquified petroleum 
      gas and feedstock consumed to fuel the refinery. 
 

HDRD Complex

During the three months and year ended December 31, 2024, the HDRD Complex averaged daily throughput of approximately 2,677 bbl/d and 2,643 bbl/d, respectively. The HDRD Complex full year utilization exceeded the previously announced target of 2,550 bbl/d by 4%.

During winter operations, the HDRD Complex produces a high-quality, low cloud point renewable diesel that meets the cold temperature specifications for diesel fuel in Canada. This operating mode requires minor reductions to throughput rates in order to optimize hydrogen production for the enhanced severity operation.

MIDSTREAM

During the fourth quarter of 2024, total throughput volumes at the midstream facilities were approximately 218 MMcf/day, compared to 308 MMcf/day in the same period of 2023, excluding the throughput volumes from the Pipestone natural gas plant, which was divested in the fourth quarter of 2023. The lower throughput was largely a result of lower producer volumes caused by producer shut-ins due to weak natural gas prices.

Midstream Gas Plant Volumes

 
                            Q2     Q3     Q4     Q1     Q2     Q3     Q4 
                             2023   2023   2023   2024   2024   2024   2024 
Gross throughput (MMcf/d)     290    312    308    302    253    217    218 
BRC(1)                         98    155    134    134     90    124    132 
Ram River                     110     88     96     96     93     31     15 
Other(2)                       82     69     78     72     70     62     71 
 
 
(1) BRC Inlet volumes include volumes at the BRC straddle 
 plant.(2) Other volumes include throughput at Tidewater's 
 extraction facilities 
 

Brazeau River Complex and Fractionation Facility

The BRC gas processing facility had throughput of 132 MMcf/day in the fourth quarter of 2024, 8 MMcf/day higher than the third quarter of 2024 during which lower producer volumes flowed into the facility due to decreased natural gas prices, and was relatively consistent with the fourth quarter of 2023.

The BRC fractionation facility utilization averaged 94% in the fourth quarter of 2024, compared to 82% in the third quarter of 2024 and 87% in the fourth quarter of 2023. Utilization was higher compared to the third quarter of 2024 primarily due to higher volumes coming into the facility. Fractionation facility utilization was higher than the fourth quarter of 2023 largely due an increase in trucked-in volumes and higher recoveries of C3+ at the BRC gas plant in the fourth quarter of 2024. Utilization of the BRC fractionation facility may vary as NGL recoveries are dependent on the gas composition coming into facility.

Ram River Gas Plant

Tidewater Midstream has a 95% operated working interest in the Ram River Gas Plant, a rail-connected sour natural gas processing facility with sulfur handling facilities located in the Strachan region in west central Alberta.

The Ram River Gas Plant had throughput of 15 MMcf/d in the fourth quarter of 2024, however, no gas was processed at the facility during the quarter as gas processing activities have been temporarily shut-in due to a decline in producer volume resulting from depressed natural gas prices. Natural gas prices are forecasted to recover during 2025, and gas processing operations are expected to resume when producer activity restarts. Sulfur handling activities were operational during the fourth quarter of 2024.

Subsequent to the end of the year, on January 7, 2025, management made the decision to temporarily lay-up the Ram River Gas Plant, including sulfur handling activities, in order to manage ongoing operating costs and to allow for gas prices to recover and gas flow from producers to resume. Management's intent is to restart the facility when commodity prices strengthen and gas flow from producers commences.

FOURTH QUARTER 2024 EARNINGS CALL

In conjunction with the earnings release, Tidewater Midstream's executives will hold a call to review its fourth quarter 2024 results via conference call on Thursday, March 27, 2025 at 11:00 am MDT (1:00 pm EDT).

To access the conference call by telephone, dial 1-437-900-0527 (local / international participant dial in) or 1-888-510-2154 (North American toll-free participant dial in). A question and answer session for analysts will follow the management's presentation.

A live audio webcast of the conference call will be available by following this link: https://app.webinar.net/B4Eoae5aYJb and will also be archived there for 90 days.

For those accessing the call via Cision's investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to join the Tidewater Midstream and Infrastructure Ltd. earnings call.

ABOUT TIDEWATER MIDSTREAM

Tidewater Midstream is traded on the TSX under the symbol "TWM". Tidewater Midstream's business objective is to build a diversified midstream and infrastructure company in the North American natural gas, natural gas liquids, crude oil, refined product and renewable energy value chain. Its strategy is to profitably grow and create shareholder value through the acquisition and development of conventional and renewable energy infrastructure.

To achieve its business objective, Tidewater Midstream is focused on providing customers with a full service, vertically integrated value chain through the acquisition and development of energy infrastructure, including downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, railcars, export terminals, storage, and various renewable initiatives. To complement its infrastructure asset base, the Corporation also markets crude, refined products, natural gas, natural gas liquids and renewable products and services to customers across North America.

Tidewater Midstream is a majority shareholder in Tidewater Renewables, a multi-faceted energy transition company focusing on the production of low carbon fuels. Tidewater Renewables' common shares are publicly traded on the TSX under the symbol "LCFS".

NON-GAAP MEASURES

Throughout this news release and in other materials disclosed by the Corporation, Tidewater Midstream uses a number of non-GAAP financial measures, non-GAAP financial ratios, capital management measures, and supplemental financial measures when assessing its results and measuring overall performance. The intent of these non-GAAP measures and ratios is to provide additional useful information to investors and analysts. Certain of these financial measures and ratios do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures and ratios presented by other entities. As such, these non-GAAP measures and ratios should not be considered in isolation or used as a substitute for measures and ratios of performance prepared in accordance with GAAP. Except as otherwise indicated, these financial measures will be calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods. The following are the Corporation's non-GAAP financial measures, non-GAAP ratios, capital management measures, and supplementary measures.

Non-GAAP Financial Measures

Consolidated and deconsolidated adjusted EBITDA

Consolidated adjusted EBITDA is calculated as net (loss) income before finance costs, taxes, depreciation, share-based compensation, unrealized gains and losses on derivative contracts, transaction costs, gains and losses on the sale of assets, and other items considered non-recurring in nature plus the Corporation's proportionate share of EBITDA in its equity investments. Deconsolidated adjusted EBITDA is calculated as consolidated adjusted EBITDA less the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables.

In accordance with IFRS, Tidewater Midstream's jointly controlled investments are accounted for using equity accounting. Under equity accounting, net earnings from investments in equity accounted investees are recognized in a single line item in the consolidated statement of net (loss) income and comprehensive (loss) income. The adjustments made to net (loss) income, as described above, are also made to share of profit from investments in equity accounted investees.

Consolidated adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. In addition to its use by management, Tidewater Midstream also believes consolidated adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions, and others to evaluate the financial performance of the Corporation and other companies in the midstream industry. From time to time, the Corporation issues guidance on this key measure. As a result, consolidated adjusted EBITDA is presented as a relevant measure in this news release and the MD&A to assist analysts and readers in assessing the performance of the Corporation as seen from management's perspective. In addition to reviewing consolidated adjusted EBITDA, management reviews deconsolidated adjusted EBITDA to highlight the Corporation's performance, excluding the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables. Investors should be cautioned that consolidated adjusted EBITDA and deconsolidated adjusted EBITDA should not be construed as alternatives to net (loss) income, net cash provided by operating activities or other measures of financial results determined in accordance with GAAP as an indicator of the Corporation's performance and may not be comparable to companies with similar calculations.

The following table reconciles net (loss) income, the nearest GAAP measure, to adjusted EBITDA:

 
                               Three months ended      Year ended 
                                December 31,            December 31, 
(in millions of Canadian           2024      2023       2024     2023 
dollars) 
Net loss                        $    (3.5)  $ (338.6)  $(18.8)  $(399.2) 
  Deferred income tax 
   recovery                          (1.6)     (33.2)    (1.6)    (51.0) 
  Depreciation                        24.8       26.3     90.5      96.8 
  Finance costs and other             21.5       26.6     81.5      99.9 
  Share-based compensation             0.4        2.2      5.0      13.9 
  Impairment (recovery) 
   expense                          (24.3)      417.6   (19.7)     417.6 
  Loss (gain) on sale of 
   assets                              1.9    (112.1)      1.0   (110.8) 
  Unrealized (gain) loss on 
   derivative contracts              (1.9)        8.6   (17.9)      52.8 
  Unrealized gain on 
   marketable securities                 -      (5.9)        -     (5.9) 
  Realized gain on marketable 
   securities                            -          -    (5.0)         - 
  Transaction costs                    0.4        9.1      4.7      13.6 
  Non-recurring transactions           3.2        7.1     14.8      16.7 
  Other non-cash expenses                -        6.4        -       6.4 
  Adjustment to share of 
   profit from equity 
   accountedinvestments              (0.9)        7.3    (0.2)      12.1 
Consolidated adjusted EBITDA    $     20.0  $    21.4  $ 134.3  $  162.9 
Less: Consolidated adjusted 
 EBITDA attributable 
 toTidewater Renewables              (6.0)     (10.7)   (74.5)    (45.9) 
Deconsolidated adjusted 
 EBITDA                         $     14.0  $    10.7  $  59.8  $  117.0 
 

Distributable cash flow and deconsolidated distributable cash flow attributable to shareholders

Distributable cash flow is calculated as net cash provided by (used in) operating activities before changes in non-cash working capital, plus cash distributions from investments, transaction costs, non-recurring transactions, and less other expenditures that use cash from operations. Also deducted is the distributable cash flow of Tidewater Renewables that is attributed to non-controlling interest shareholders. Management believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal operations.

Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes and are generally funded with short-term debt or cash flows from operating activities. Transaction costs are added back as they can vary significantly based on the Corporation's acquisition and disposition activity. Non-recurring transactions that do not reflect Tidewater Midstream's ongoing operations are also excluded. Lease payments, interest and financing charges, and maintenance capital expenditures, including turnarounds, are deducted as they are ongoing recurring expenditures which are funded from operating cash flows.

Deconsolidated distributable cash flow is calculated by subtracting the portion of Tidewater Renewables' distributable cash flow that is attributed to shareholders of Tidewater Midstream from distributable cash flow attributable to shareholders.

The following table reconciles net cash provided by (used in) operating activities, the nearest GAAP measure, to distributable cash flow and deconsolidated distributable cash flow:

 
                   Three months endedDecember 31,   Year endedDecember 31, 
(in millions of         2024          2023              2024       2023 
Canadian dollars) 
Net cash provided 
 by (used in) 
 operating 
 activities          $      16.9   $         (5.2)   $    (33.5)  $    137.5 
Add (deduct): 
Changes in 
 non-cash 
 operating 
 working capital           (8.5)               0.7         134.0      (37.3) 
Transaction costs            0.4               9.1           4.7        13.6 
Non-recurring 
 transactions                3.2               7.1          14.8        16.7 
Interest and 
 financing 
 charges                  (13.9)            (20.8)        (52.8)      (70.9) 
Payment of lease 
 liabilities and 
 other, net of 
 subleasepayments          (8.6)            (11.7)        (36.4)      (47.0) 
Maintenance 
 capital                   (4.0)            (14.5)        (23.8)      (76.0) 
Tidewater 
 Renewables' 
 distributable 
 cash flow to 
 non-controlling 
 interest 
 shareholders                2.8             (0.7)        (10.1)       (0.9) 
Distributable 
 cash flow 
 attributable to 
 shareholders        $    (11.7)   $        (36.0)   $     (3.1)  $   (64.3) 
Tidewater 
 Renewables' 
 distributable 
 cash 
 flowattributed 
 to shareholders 
 of Tidewater        $       5.1   $         (1.4)   $    (19.6)  $    (1.8) 
Deconsolidated 
 distributable 
 cash flow 
 attributableto 
 shareholders        $     (6.6)   $        (37.4)   $    (22.7)  $   (66.1) 
 

Growth capital expenditures are generally funded from retained operating cash flow and additional debt or equity, as required.

Non-GAAP Financial Ratios

Tidewater uses non-GAAP financial ratios to present aspects of its financial performance or financial position, primarily distributable cash flow per share.

Distributable cash flow and deconsolidated distributable cash flow per share

Distributable cash flow per share is calculated as distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period.

Deconsolidated distributable cash flow per share is calculated as deconsolidated distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Management believes that these measures provide investors an indicator of funds generated from the business that could be allocated to each shareholder's equity position.

 
                  Three months endedDecember 31,   Year endedDecember 31, 
(in millions of        2024          2023              2024        2023 
Canadian dollars 
except share and 
per share 
information) 
Distributable 
 cash flow 
 attributable to 
 shareholders       $    (11.7)   $        (36.0)   $      (3.1)  $   (64.3) 
Deconsolidated 
 distributable 
 cash flow 
 attributable 
 toshareholders     $     (6.6)   $        (37.4)   $     (22.7)  $   (66.1) 
Weighted average 
 common shares 
 outstanding 
 --Basic and 
 diluted 
 (millions)               430.5             427.1          429.5       425.4 
Distributable 
 cash flow per 
 share -- basic 
 and diluted        $    (0.03)   $        (0.08)   $     (0.01)  $   (0.15) 
Deconsolidated 
 distributable 
 cash flow per 
 share --basic 
 and diluted        $    (0.02)   $        (0.09)   $     (0.05)  $   (0.16) 
 

Capital Management Measures

Consolidated and deconsolidated net debt

Consolidated net debt is defined as bank debt, second lien debt, and convertible debentures, less cash. Consolidated net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation's overall financial strength.

In addition to reviewing consolidated net debt, management reviews deconsolidated net debt to highlight Tidewater Midstream's financial flexibility, balance sheet strength and leverage. Deconsolidated net debt is calculated as consolidated net debt less the portion attributable to Tidewater Renewables.

Consolidated and deconsolidated net debt exclude working capital, lease liabilities and derivative contracts as the Corporation monitors its capital structure based on deconsolidated net debt to deconsolidated adjusted EBITDA, consistent with its credit facility covenants as described in the LIQUIDITY AND CAPITAL RESOURCES section.

The following table reconciles consolidated and deconsolidated net debt:

 
(in millions of Canadian dollars)              December 31,   December 31, 
                                                2024           2023 
Tidewater Midstream Senior Credit Facility    $       281.8  $       322.3 
Tidewater Renewables Senior Credit Facility            20.9          171.8 
Tidewater Renewables Second Lien Credit 
 Facility                                             175.0          175.0 
2024 Convertible Debentures - principal               100.0              - 
2019 Convertible Debentures - principal                   -           75.0 
Cash                                                  (0.1)          (0.1) 
Consolidated net debt                         $       577.6  $       744.0 
Less: Tidewater Renewables Senior Credit 
 Facility                                            (20.9)        (171.8) 
Less: Tidewater Renewables Second Lien 
 Credit Facility                                    (175.0)        (175.0) 
Add: Tidewater Renewables cash                          0.1            0.1 
Deconsolidated net debt                       $       381.8  $       397.3 
 

Supplementary Financial Measures

"Growth capital" expenditures are generally defined as expenditures which are recoverable or incrementally increase cash flow or earnings potential of assets, expand the capacity of current operations or significantly extend the life of existing assets. This measure is used by the investment community to assess the extent of discretionary capital spending.

"Maintenance capital" expenditures are generally defined as expenditures which support and/or maintain the current capacity, cash flow or earnings potential of existing assets without the associated benefits characteristic of growth capital expenditures. These expenditures include major inspections and overhaul costs that are required on a periodic basis. This measure is used by the investment community to assess the extent of non-discretionary capital spending. Maintenance capital is included in the calculation of distributable cash flow.

Deconsolidated "net (loss) income attributable to shareholders" is comprised of net income or loss attributable to shareholders, as determined in accordance with IFRS, less the net income or loss of Tidewater Renewables attributed to the shareholders of Tidewater Midstream.

Deconsolidated "net (loss) income attributable to shareholders -- per share" is calculated by dividing deconsolidated "net income or loss attributable to shareholders" by the basic weighted average number of Tidewater Midstream common shares outstanding for the period.

Deconsolidated "Total capital expenditures" is comprised of consolidated capital expenditures, as disclosed in Tidewater Midstream's statement of cash flows, less the capital expenditures of Tidewater Renewables.

OPERATIONAL DEFINITIONS

"bbl/d" means barrels per day; "MMcf/d" means million cubic feet per day.

"BC LCFS" means, collectively, prior to January 1, 2024, BC's Greenhouse Gas Reduction (Renewable & Low Carbon Fuel Requirements) Act and the Renewable & Low Carbon Fuel Requirements Regulation, introduced to reduce the CI of fuels used in the province, and on and after January 1, 2024, BC's Low Carbon Fuels Act, the Low Carbon Fuels (General) Regulation and the Low Carbon Fuels (Technical) Regulation;

"BC LCFS Credits" means the credits awarded to BC Part 3 Fuel Suppliers by either (i) supplying a fuel with a CI below the prescribed CI limit, or (ii) taking actions that would have a reasonable possibility of reducing greenhouse gas emissions through the use of Part 3 fuels sooner than would occur without the agreed-upon action, which credits may be transferred upon validation. BC LCFS Credits are tradable certificates and can be bought and sold in a market to help companies meet their regulatory obligations. The purpose of these credits is to incentivize the use of cleaner, low-carbon fuels and to help reduce the overall greenhouse gas emissions in the transportation sector.

"BC Part 3 Fuel Suppliers" means, prior to January 1, 2024, a "part 3 fuel supplier" under the BC LCFS, and on and after January 1, 2024, a person who markets fuel in BC under Part 2 of the Low Carbon Fuels Act.

"Refinery yield" (expressed as a percentage) represents the percentage of finished product produced from inputs of crude oil and renewable feedstock as well as intermediates. Refinery yields are an important measure of refinery performance indicating the outputs that running a particular feedstock and intermediates through a refinery configuration will produce.

"Throughput" with respect to a natural gas plant, means inlet volumes processed (including any off-load or reprocessed volumes); with respect to a pipeline, the estimated natural gas or liquid volume transported therein; and with respect to NGL processing facilities, means the volume of inlet NGLs processed.

"U.S." meaning the United States of America, its territories and possessions, any state of the United States and the District of Columbia

Advisory Regarding Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively referred to herein as, "forward-looking statements") within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of Tidewater Midstream based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as "seek", "anticipate", "budget", "plan", "continue", "forecast", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "will likely result", "are expected to", "will continue", "is anticipated", "believes", "estimated", "intends", "plans", "projection", "outlook" and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon.

In particular, this news release contains forward-looking statements pertaining to but not limited to the following:

   -- expectations regarding the timing and effect of the Complaint and 
      Investigation, including the imposition of duties on U.S. renewable 
      diesel imports; 
 
   -- purchases of BC LCFS Credits under the BC LCFS Credit Purchase Agreement; 
 
   -- the receipt of the balance of the total proceeds from the sale of 
      Tidewater Renewables' interest in RNG LP; 
 
   -- the expected effect of the Amendments on the emissions credit markets and 
      the broader Canadian biofuels industry; 
 
   -- the sale of the BRC Roadway Network, including the receipt of the balance 
      of the total proceeds from the sale, the expected timing of closing and 
      the use of proceeds from the sale; 
 
   -- the PGR turnaround cycle and the next scheduled outage; 
 
   -- marketing efforts regarding the Corporation's products; 
 
   -- pricing expectations for the Corporation's products; 
 
   -- supply and demand for products and services; 
 
   -- the effect of selling additional gasoline and diesel volumes on the spot 
      gasoline and diesel markets and geographic markets other than Western 
      Canada; 
 
   -- operations and performance at the HDRD Complex 
 
   -- expected throughput and utilization, including causes of variances 
      thereof; 
 
   -- natural gas pricing expectations; 
 
   -- expectations regarding producer activity; 
 
   -- the resumption of operations at the Ram River Gas Plant; 
 
   -- the Corporation's view of the BC LCFS emission credit market; and 
 
   -- Tidewater Midstream's business strategy 

Although the forward-looking statements contained in this news release are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this news release, the Corporation has assumptions regarding, but not limited to:

   -- the Corporation's ability to execute on its business plan; 
 
   -- the effect of Tidewater Renewables' business operations on Tidewater 
      Midstream; 
 
   -- the timely receipt of all governmental and regulatory approvals sought by 
      the Corporation; 
 
   -- future commodity prices, including natural gas, crude oil, NGL and 
      renewable energy prices; 
 
   -- the market for BC LCFS Credits, including that such market will improve 
      and the timing thereof; 
 
   -- general economic and industry trends; 
 
   -- impacts of commodity prices and demand on the Corporation's working 
      capital requirements; 
 
   -- continuing government support for existing policy initiatives; 
 
   -- processing and marketing margins; 
 
   -- impacts of seasonality and climate disruptions; 
 
   -- future capital expenditures to be made by the Corporation; 
 
   -- foreign currency, exchange and interest rates, and expectations relating 
      to inflation; 
 
   -- that there are no unforeseen events preventing the performance of 
      contracts; 
 
   -- the availability of equipment and personnel required for Tidewater 
      Midstream to execute its business plan; 
 
   -- the amount of future liabilities relating to lawsuits and environmental 
      incidents and the availability of coverage under the Corporation's 

      insurance policies; 
 
   -- volume demands from the PGR and HDRD Complex are consistent with 
      forecasts; 
 
   -- successful negotiation and execution of agreements with counterparties; 
 
   -- oil and gas industry exploration and development activity and the 
      geographic region of such activity; 
 
   -- the Corporation's ability to obtain and retain qualified staff and 
      equipment in a timely and cost-effective manner; 
 
   -- the amount of operating costs to be incurred; 
 
   -- that there are no unforeseen costs relating to the facilities, not 
      recoverable from customers; 
 
   -- distributable cash flow and net cash provided by operating activities are 
      consistent with expectations; 
 
   -- the ability to obtain additional financing on satisfactory terms; 
 
   -- the availability of capital to fund operations and future capital 
      requirements relating to existing assets and projects; 
 
   -- the ability of Tidewater Midstream to successfully market its products; 
 
   -- the successful integration of acquisitions and projects into the 
      Corporation's existing business; and 
 
   -- the Corporation's future debt levels and the ability of the Corporation 
      to repay its debt when due. 

The Corporation's actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to:

   -- changes in demand for refined and renewable products; 
 
   -- general economic, political, market and business conditions, including 
      fluctuations in interest rates, foreign exchange rates, stock market 
      volatility, BC LCFS Credit market volatility; supply/demand trends, armed 
      hostilities, acts of war, terrorism, cyberattacks, trade disruptions, 
      diplomatic developments and inflationary pressures; 
 
   -- Tidewater Renewables' ability to continue as a going concern; 
 
   -- activities of producers and customers and overall industry activity 
      levels; 
 
   -- failure to negotiate and conclude any required commercial agreements; 
 
   -- non-performance of agreements in accordance with their terms; 
 
   -- failure to execute formal agreements with counterparties in circumstances 
      where letters of intent or similar agreements have been executed and 
      announced by Tidewater Midstream; 
 
   -- the imposition of tariffs and the corresponding impact on producer 
      activity and the supply and demand for the Corporation's products; 
 
   -- failure to close transactions as contemplated and in accordance with 
      negotiated terms; 
 
   -- the conflict in Ukraine and the Middle East and the corresponding impact 
      on supply chains and the global economy; 
 
   -- risks of health epidemics, pandemics, public health emergencies, 
      quarantines, and similar outbreaks, including COVID-19, which may have 
      sustained material adverse effects on the Corporation's business 
      financial position results of operations and/or cash flows; 
 
   -- changes in environmental and other laws and regulations or the 
      interpretations of such laws or regulations ; 
 
   -- cost of compliance with applicable regulatory regimes, including, but not 
      limited to, environmental laws and regulations, including greenhouse gas 
      emissions; 
 
   -- Indigenous and landowner consultation requirements; 
 
   -- climate change initiatives or policies or increased environmental 
      regulation; 
 
   -- that receipt of third party, regulatory, environmental and governmental 
      approvals and consents relating to Tidewater Midstream's capital projects 
      can be obtained on the necessary terms and in a timely manner; 
 
   -- that the resolution of any particular legal proceedings could have an 
      adverse effect on the Corporation's operating results or financial 
      performance; 
 
   -- competition for, among other things, business capital, acquisition 
      opportunities, requests for proposals, materials, equipment, labour and 
      skilled personnel; 
 
   -- the ability to secure land and water, including obtaining and maintaining 
      land access rights; 
 
   -- operational matters, including potential hazards inherent in the 
      Corporation's operations and the effectiveness of health, safety, 
      environmental and integrity programs; 
 
   -- actions by governmental authorities, including changes in regulation, 
      tariffs and taxation; 
 
   -- changes in operating and capital costs, including fluctuations in input 
      costs; 
 
   -- legal risks and environmental risks and hazards, including risks inherent 
      in the transportation of NGLs and refining of light crude oils which may 
      create liabilities to the Corporation in excess of the Corporation's 
      insurance coverage, if any; 
 
   -- actions by joint venture partners or other partners which hold interests 
      in certain of the Corporation's assets; 
 
   -- reliance on key relationships and agreements; 
 
   -- losses of key customers; 
 
   -- construction and engineering variables associated with capital projects, 
      including the availability of contractors, engineering and construction 
      services, accuracy of estimates and schedules, and the performance of 
      contractors; 
 
   -- the availability of capital on acceptable terms; 
 
   -- changes in the credit-worthiness of counterparties; 
 
   -- adverse claims made in respect of the Corporation's properties or assets; 
 
   -- risks and liabilities associated with the transportation of dangerous 
      goods and derailments; 
 
   -- effects of weather conditions (such severe weather or catastrophic events 
      including, but not limited to, fires, floods, lightning, earthquakes, 
      extreme cold weather, storms or explosions); 
 
   -- reputational risks; 
 
   -- reliance on key personnel; 
 
   -- technology and security risks, including cybersecurity; 
 
   -- potential losses which would stem from any disruptions in production, 
      including work stoppages or other labour difficulties, or disruptions in 
      the transportation network on which the Corporation is reliant; 
 
   -- technical and processing problems, including the availability of 
      equipment and access to properties; 
 
   -- changes in gas composition; and 
 
   -- failure to realize the anticipated benefits of acquisitions. 

The foregoing lists are not exhaustive. Additional information on these and other factors which could affect the Corporation's operations or financial results are included in the Corporation's most recent AIF and in other documents on file with the Canadian securities regulatory authorities. Additionally, the Corporation faces certain risks as the majority shareholder of Tidewater Renewables including, without limitation, liquidity risk, commodity price risk (including in respect of the markets for BC LCFS Credits, CFR emission credits and other carbon credits, rebates, tax credits, grants and other incentives), equity risk, credit risk and risks related to changes in environmental regulations, economic, political or market conditions and the regulatory environment.

Management of the Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this news release in order to provide holders of common shares in the capital of the Corporation with a more complete perspective on the Corporation's current and future operations and such information may not be appropriate for other purposes.

The Corporation's actual results performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any off them do occur, what benefits the Corporation will derive therefrom. Readers are therefore cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this news release. Tidewater Midstream does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities law. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Further information about factors affecting forward-looking statements and management's assumptions and analysis thereof is available in filings made by the Corporation with Canadian provincial securities commissions available on the System for Electronic Document Analysis and Retrieval ("SEDAR+") at www.sedarplus.ca.

SOURCE Tidewater Midstream and Infrastructure Ltd.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2025/27/c5282.html

/CONTACT:

Jeremy Baines Chief Executive Officer, Tidewater Midstream & Infrastructure Ltd.; Aaron Ames, Chief Executive Officer, Interim Chief Financial Officer, Tidewater Midstream & Infrastructure Ltd; For further information please contact: Michael Gracher, Manager, Investor Relations, Tidewater Midstream & Infrastructure Ltd, mgracher@tidewatermidstream.com

Copyright CNW Group 2025 
 

(END) Dow Jones Newswires

March 27, 2025 07:00 ET (11:00 GMT)